INTRODUCTION

This publication contains proceedings of the Conference

organized by the Institute of Political Economy, University of

Lodz at Rogow /near Lodz/ in December 1984.

The depth of the reform planned in Poland makes it

comparable to the reforms in Yugoslavia and Hungary. Empirical

and theoretical studies1on the process of the economic reform's

Introduction in Poland conducted by the Institute since 1982

allowed to determine many interesting phenomena and determinants

in conviction of the research team composed of the Institute's

staff. This gave rise to an idea of organizing a Conference

with participation of Yugoslavian and Hungarian Economists.

The aim of this Conference was to create convenient conditions

for a direct exchange of views on common features and

differences in determinants, dynamics and scope of transforma-

tions taking place in these countries. For reasons beyond the

control of the organization committee, the invited Yugoslavian

economists did not participate in it. Consequently, the

Conference provided an opportunity to present, compare and

evaluate solutions adopted in Poland and Hungary.

Since the Conference was organized in Poland, it was quite

natural that the number of papers presented by the Polish

authors was predominant /8 out of the total number of 12/i

The authors of the papers on the Polish side were faculty

members in the Institute of Political Economy at the University

of Lodz, participating in the studies, and professor K. Porwit

from the Central School of Planning and Statistics. The

Hungarian side was represented by the authors employed in the

Economic Institute including professor M. Tardos, director of

this Institute, and in the Institute of the World Economy in

Budapest.

• - •

Both these Institutes belong to the Hungarian Acadeny of Sciences

The presented papers provided a basis for animated

discussion. Within the framowork of this discussion, there vere

moved many problems with the most important among them being:

social determinants of reforms, structure and functions of the

central state administration, problem of recurrence of the

system based on commands and centralized allocations and

distribution of production means in the form of covert

directives, conditions determining effectiveness of parametric

regulation of economic processes, and role of the market

mechanism. In the case of almost all discussed problems,

comparisons were made between economic reform processes in

Hungary and Poland.

The discussion did not undermine the ideas contained in the

presented papers and, therefore, they have been Included into

this publication with out changes in their contents.

The entire publication has been divided into two parts. The

first part includes papers devoted to dlrrerent aspects of the

Polish economic reform, while the second part concerns problems

connected with the Hungarian reform.

Ia the "Polish" part, there are analyzed problems of the

technocratic and the democratic variants of the reform. It. Is

in this context, that the authors analyze role of the socialist

state both on macro- and microscale by means of evaluation of

effectiveness regarding solutions regulating activities of

industrial and agricultural enterprises. The authors' argu-

mentation, generally speaking, goes in direction of the

democratic variant, the market economy regulated by the plan*

This problem has received a bigger deal of attention in the

last article closing the first part of the publication.

In the second part, in confrontation with solutions adopted

in the Hungarian economy, there are analyzed practical and

theoretical aspects of possibilities to regulate all economic

processes by the state with a wide utilization of the market

self-regulation. The last paper in this part analyzes determi-

nants in the process of formation of reformatory ideas in

Hungary and Poland. *

The first part орепз with a contribution of J« If u J ż e l *

who presents two variants of the economic reform - technocratic

and democratic. Pointing out weaknesses of the technocratic

variant, he declares fully in favour of the democratic variant.

While analyzing advantages of this variant, J. Mujżel indicates

its weaker and insufficiently developed elements calling for

more intensified intellectual effort. The theoretical conclu-

sions are confronted with findings of empirical studies.

W. C a b a n undertakes in his article the question of

sovereign state control over the economy, and proves that for

the state to perform such a role it is of decisive importance

to ensure appropriate relationships of three kinds; relation-

ships between the institutional environment and the state, and

more precisely within the economic centre, and relationships

between the economic centre and enterprises. Referring to

empirical experience, the author proves that the form of these

relationships is far from desirable. In the final part of the

article, W. Caban analyzes the main causes of this situation.

K. P o r w i t in his article deals with the main changes in

the area of planning resulting from the economic reform. The

author stresses that these changes are aimed, firs of all, at

ensuring autonomy for an enterprise as a condition in promoting

higher effectiveness of economic management. Thera is also

stressed importance of the financial aspect of planning,

planning structure and procedure as a safeguard against wrong

choices. As essential condition, which is to protect against

wrong choices, is social participation in planning, decision-

making and management. A. F o r n a l c z y k and

V. K a s p e r k i e w i c z make a distinction between

concepts of the bureaucratic monopoly and the majrket monopoly.

The new economic system liquidates the bureaucratic monopoly

but leads to creation of the market monopoly. The authors

present arguments in favour of demonopolization of the economy.

Lack of appropriate institutional and organizational changes in

the previous practice does not create favourable conditions for

realization of this postulate. A considerable part of the

article is devoted to analysis of areas and instruments of the

antimonopoly policy.

The paper prepared by A*- K r a • w a- к a- and S* K r a -

j e w s k i along with two other papers deal directly with pro-

blems of an enterprise. A. and S. Krajewski analyze effective-

ness of the new system of their functioning, first of all on

the micro scale. In this analysis, the authors underline

strongly that system solutions cannot ignore the existence of

autonomous goals in the enterprise's activity but they should

make a purposeful use of these goals. Otherwise, it will lead

to decay of motivation. It is being proved by the authors that

as this requirement is far from being fulfilled the macroeco-

nomic effectiveness is low as well. A. B i e ń k o w s k i ,

W. Ł y c z e k and W. P u l i ń s k i undertaking analysis

of functioning of state agricultural enterprises, • i.e.

enterprises operating in a sphere considerably different from

that in which industrial enterprises work, analyze - in fact -

the same problems, which are discussed in other articles. Their

attention is focussed on organizational changes in the system

of state agricultural enterprises, instruments of steering

economic processes, and motivation system. Referring to the

findings of empirical studies and literature of the subject,

they point out shortcomings in adopted solutions, whose removal

determines progress in effectiveness of economic management.

E. M a ł e c k a and R. Z i e l i ń s k i tackle the

problem of adaptation capacities of enterprises. Distinguishing

between autonomous and higher effectiveness of economic mana-

gement, the authors prove that enterprises revealed big adapta-

bility in conditions created by centralregualtlons for reali-

zation of their autonomous goals. In the final part of this

article, an attempt has been made to quantify adaptation

capacities of enterprises»

The article ofC. J ó z e f i a k closes the first part

of the publication In the formal sense, as the last article

included into this part, and with regard to the analyzed

subject area. The author, summing up in a way the earlier

analysis, presents two concepts of the economic reforms the

concept of socialized market economy regulated by the plan and

the model of the state indirect regulation encompassing long-

term and current processes. The second model, in the author's

opinion, differs from the model based off commands and centrali-

zed allocations and distribution of means of production mainly

with regard to instruments employed in execution of central

plans and instruments with which enterprises are steered* While

analyzing the main factors restricting depth of the reform,

C« Józefiak formulates a view that changes effected so far in

the economic system aim at hybrid solutions, which do not

guarantee a desirable social effectiveness of economic

management*

The second part of the publication opens with an article of

M. T a r d о s, who performs analysis of the economic policy

in the years 1979-1983 against the background of Hungary's

indebtedness in Western countries* The author shows that

through precise regulation of wages, import, control of prices

and the market, taxation of enterprises, the country managed to

attain an equlibriun in its balance of payments. That was,

however, a policy promoting equilibrium and not economic growth.

In the final part of the article, the author analyzes

a possibility of replacing detailed reflation of economic

processes by a policy aiming at preservation of harmony between

total demand and economic effectiveness with leaving

a sufficient space for self-regulation. Such an approach would

favour more economic growth. Nonetheless, the author does not

see any possibility of such a change at present* T* B a u e r ,

proceeding from an assumption that a basic task faced by

Hungary is contlnutation of the economic reform, distinguishes

two approaches to this problem. The first consists in replacing

direct methods of central management by indirect methods,

without narrowing the range of economic processes subjected to

direct central management. The second approach expresses itself

in replacing direct central management of the economy by

, indirect methods, encompassing all economic processes* While

supporting the second approach, the author analyzes main

counterarguments formulated by opponents* Pointing at their

insufficient Justification, T* Bauer concludes that they do not

pose an obstacle in continuation of the reform according to the

second concept* А* I. n z e l t focusses attention on the

organizational system in the Hungarian industry. The analysis

is focussed on the organizational structure of the industry,

with the'size of the enterprise according to the number of

employees being accepted for a criterion. The authoress points

out that1he Hungarian industry is excessively concentrated

with its simultaneous territorial and technical dispersion. In

the second part of the article, it is shown that changes in

Industrial organization« Involved, among others, taking OTvr

thalr functions either by superior administrative units or by

other economic organizations. This led to the veskenlng of

economic effectiveness of lndustrlsl enterprises. Finally, the

authoress formulates s postulate about necessity of modernizing

the organizational struoture of • the Hungarlsn industry.

K. M i s s e l performs in his article a comparative analysis

of Hungarian and Polish concepts of economic reforms snd their

practical Implementation.He proves that the problem of economic

reform was undertaken in conditions of economic political

crisis. Experience provided by sttempta at launching reforma

and the experience oonected with the functioning of planned

economies were generalized by the economic science. Its effect

was undertaking new reformatory attempts in a more mature way.

A significant moment, especially in the Polish experience. Is

appearance of a new, young generation of economlata bringing an

important contribution to concepts of economic reforms. The

final part of the article deala with practical aspects of the

economic reform in Hungary and Poland In the early eighties.

^11 artiolea, lnoluded Into this publication, present rese-

arch findings up to 1 9 9 3 .

Lodz, January 1985Wiesle« Cab aa